In our prior post, we recommended that the Evergreen Cemetery Association explore the Minnesota trust code provisions regarding the trustee’s power to adjust (501C.1112). This is something other “excluded” cemeteries should also consider. By excluded, we mean cemeteries owned by associations, churches, cities or counties that are typically excluded from regulation of
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An Update to the Cemetery Unitrust Movement: a few more states but lagging interest on the part of cemeteries
It has been three years since we last posted about those states that have passed laws allowing cemetery trusts to take a unitrust election. Since then, Arizona, California and Indiana have joined the list. The movement towards fixed care fund distributions has not caught on as quickly as some thought when the concept was introduced…
Missouri Cemetery Associations and Preneed: So Many Obstacles
In contrast to Missouri’s Chapter 214, most states’ cemetery laws do not exempt all cemetery associations from care fund requirements. We do find that some states exempt small non-profit cemeteries (typically based on acreage). Some states limit non-profit cemetery exemptions to grandfathered situations (a cemetery established prior to 1940). These small cemetery associations are more…
Death Care Trade Associations: Will New Blood Be Enough?
With the Dead Beat’s permission, we are sharing at a column they ran earlier this summer. An anonymous contributor suggested that Death Care associations are headed for obsolescence. The author noted that attendance at Midwest conventions have dropped dramatically, and attributed this in part to a failure to adapt meetings and conventions to the…
Chasing Preneed’s Bad Apples
In September of last year, the Columbus Dispatch published a story critical of the Ohio State Board of Funeral Directors and Embalmers. Examining the Board’s efforts to address preneed fraud, the story reported that prosecutions of funeral directors were more the result of consumer complaints than Board inspections. That must have struck a nerve…
Trustee Investment Liability: The Preneed Purchaser Wild Card
Back in March, the NPS Special Deputy Receiver won a judgement of $355 million against PNC Bank (as successor to Allegiant Bank). In defense of Allegiant Bank, PNC argued that Missouri’s Chapter 436 defined the trustee’s duties as owed solely to the preneed seller. That was the intent of the Missouri Funeral Directors Association when…
Trust Shortages: Sponsorship Fees
It was been almost 7 years since we posted the piece titled “Trade Association Membership: weighing the costs vs. the benefits”. Towards the end of that article, we discuss how the master trust sponsor fee provides a crucial source of revenue to state associations. That post was written subsequent to the dissolution of…
Missouri Funeral Trust: Seeking a Gag Order
On July 27th, a Missouri court will consider a motion filed by the Missouri State Board of Embalmers and Funeral Directors to be dismissed from the lawsuit filed by the Missouri Funeral Trust. One of the allegations made by the Missouri Funeral Trust was that confidential information obtained by a state auditor regarding the program’s…
Association Master Trusts: De Facto Trustees
According to court filings, the reorganization plans for the Wisconsin Master Trust and California Master Trust each seek to eliminate ‘de facto trustee’ relationships that allowed the respective associations’ executives to ‘misuse, misspend, and mismanage millions of dollars’ of trust funds, and to direct funds towards inappropriate and unsuitable investments that served the association’s, rather…
The Wisconsin Master Trust: Between a Rock and a Hard Place
In a motion to convert the Wisconsin Master Trust from a preneed trust to a liquidating trust, the Receiver outlined to the court why the trust cannot keep its promises to consumers and comply with Wisconsin’s preneed law. Section 445.125 restricts preneed funeral trusts to depository accounts, and CD returns won’t even pay the…